DuPont Decomposition
Why does GENCON earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
4.3% = 4.0% × 0.66 × 1.61
Latest: FY2025
Profitability
Net Margin
4.0%
5.3% →4.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.66x
0.82x →0.66x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.61x
1.60x →1.61x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 2.8 pp over 4 years. Driven by net margin declining (5.3% → 4.0%), asset turnover declining (0.82x → 0.66x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 5.3% | 0.82 | 1.60 | 7.0% |
| FY2023 | ₹0Cr | ₹0Cr | 5.6% | 0.71 | 1.53 | 6.1% |
| FY2024 | ₹0Cr | ₹0Cr | 3.9% | 0.62 | 1.76 | 4.2% |
| FY2025 | ₹0Cr | ₹0Cr | 4.0% | 0.66 | 1.61 | 4.3% |
How to read DuPont
- • Rising ROE from margin = pricing power, operational improvement (good)
- • Rising ROE from turnover = better asset utilization (good)
- • Rising ROE from leverage = more debt, amplified risk (caution)
- • Falling ROE across all three = structural deterioration (red flag)
DuPont decomposition from audited annual financials. Factual analysis, not investment advice.